Congratulations! You\'ve won a state lotto! The state lottery offers you the fol

Question

Congratulations! You've won a state lotto! The state lottery offers you the following (after-tax) payout options: (Click the icon to view the payout options.) (Click the icon to view the present value annuity factor table. (Click the icon to view the future value annuity factor table.) Click the icon to view the present value factor table. (Click the icon to view the future value factor table.) Requirement Assuming that you can earn 10% on your funds, which option would you prefer? (Round your answers to the nearest whole dollar) Calculate the present value for each payout Option #1: Option #2: Option #3: The option you would you prefer is the one that has the | present value. Therefore, I would be the preferred payout option

Explanation / Answer

Option 1 9562000 =14000000*0.683 Option 2 8150650 =2150000*3.791 Option 3 9387500 =12500000*0.751 The option with highest present value should be preferred. Option 1 is preferred payout option

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